You may be confusing the use of construction terms. The second floor porch interfering with the vent terminal sounds like the vent terminal your contractor is talking about is the square, round, or oblong fire prevention flashing device that your Building Plans call for, is going to get in the way of the floor joists for the porch. You can go to a plumbing and heating supply store that LICENSED trades use, show them your plans, and ask for different terminal types for your porch area. Your contractor is probably too busy to go do this shopping for you, (so do it yourself) and you can save yourself a lot of headaches.

: Unless he is going to make a separate room for the water heater by taking space from the bathroom, the water heater cannot go in the "bathroom space". Without seeing the installation, it is difficult to tell how the vent could safely and efficiently be installed.

: : I am having a new house built. Recently the contractor has come back and said that the stairs from then second level poarch would interfear with the "vent terminal" for the gas heater and his solution was to move the water heater into the bathroom space. I stated that I wanted to keep the heater were it was, as to not interfear with the bathroom space. My question is: could the vent terminal be extended up then run out of the wall with out afecting the efficiency and safety of the heater?